Kenya’s National Treasury has projected a robust economic growth rate of 5.3% for the year 2025, up from a modest 4.6% in 2024, as per the recently released Budget Policy Statement.
The anticipated growth marks a rebound from a contraction experienced in 2024, attributed to a slowdown in private sector credit and a deceleration of economic activities during the initial three quarters.
The Treasury’s optimistic outlook is largely anchored in heightened agricultural productivity and a resilient services sector. Favorable weather conditions and targeted government interventions are expected to enhance agricultural output, estimated to grow at an average rate of 3% in 2025. This improvement represents a significant step toward economic recovery, with agriculture playing a crucial role in sustaining livelihoods and stimulating related sectors.
Furthermore, the services sector is projected to maintain its strength, with an anticipated growth rate of 6.6% over the medium term. Ongoing reforms in the ICT industry are expected to drive growth across financial services, healthcare, and public administration, fostering innovation and improving service delivery.
The Treasury has also highlighted the role of tourism in bolstering growth, as the government intensifies efforts to revitalize the sector through international conferences, cultural festivals, and wildlife safaris. These initiatives aim to attract more visitors, thereby contributing to job creation and national revenue.
Cabinet Secretary for the National Treasury, John Mbadi, emphasized the government’s commitment to enhancing fiscal consolidation to mitigate public debt vulnerabilities. This strategy will ensure the provision of critical public goods and services, thereby creating the necessary fiscal space to support sustained economic growth.
In summary, Kenya’s economic outlook for 2025 presents a cautiously optimistic view, underpinned by strategic initiatives in agriculture and services, ensuring a pathway toward recovery and growth.
